Kansas State University Athletics
Ask The A.D. — The Future | Part 1
Feb 05, 2025 | Athletics
Brian Smoller (BS): Hello and welcome to a special edition of Ask The AD – The Future Part 1, a three part series with change coming for college athletics and for K-State. The Athletics Director at K-State, Gene Taylor, alongside, I'm Brian Smoller. Glad you could join us, and we're going to get into all of this coming up over the next three weeks, bringing you some series of videos describing what that change is, what it means for us as K-Staters, and then what it means going forward in college athletics, and how we all can pull together here. And we'll talk about that coming up a little bit later. It's going to be important.
Gene Taylor (GT): That'll be really important, absolutely.
BS: Let's start with the just the 40,000-foot view. The House settlement is kind of what we're talking about here, this is, what is the change that is coming this summer. I think people hear the phrase "House settlement", they think Congress. That's not necessarily what this is.
GT: No, it's a class action lawsuit brought by a group of athletes, but it was named after a swimmer at Arizona State whose last name is House. Obviously, there's a lot of athletes involved with it, and there's two pieces of this class action lawsuit that has been settled. It's now sitting in Judge Wilkins' court in California. She has until April 7, or sometime in April, to finalize the settlement. Both the plaintiffs and the defendants have been months and months you know, negotiating the settlement between the two sides. NCAA Division 1 institutions, primarily the Power Four/Power Five, in this group of plaintiffs. And so what it is is there's two pieces. There's a piece of those athletes that never had a chance to get their name, image, and likeness dollars. And that is back pay money that will come over a 10-year period to anybody who competed, from 2016 until a year ago. And then there's going forward money, which is the dollars that we will share institutionally with our student athletes. And that dollar is based on 22% of the average revenue of the Power Five revenues. And so that 22% equates out to about $20,500,000. Those dollars we will share with our student athletes going forward, starting in July of 2025. The back pay is a lot. It's 10 million a year over 10 years, and that's being distributed outside of the institutions, but through the NCAA and some other revenue sources.
BS: The $20.5 million is not the only number that will be added, because with this settlement, there is also the sort of tweaking of rosters per sport, addition and subtraction of scholarships.
GT: Yeah, so before we used to have scholarship limits. What's happening is anything that limits the student athletes' ability for opportunities, whether it's scholarships, whether it's the ability to transfer to another institution, that's where this lawsuit stemmed from. Is we were limiting the student athletes, or there was the perception of we were limiting. They still had a lot of little, great opportunities, clearly. So what they've done is, part of the settlement is they said, 'Okay, we're no longer going to make scholarship limits an issue.' If you want to give 34 baseball scholarships, go right ahead, if you want to give 105 football scholarships. But in that agreement, the other side of that is our side said, 'Well, we have to limit our rosters'. And so now we will have roster limits. Football will be 105, baseball will be 34, etc., all down the line. But if you wanted to, you could give as many scholarships as you'd like within that roster. I don't think any school is going to do that. They're going to maybe add some here on the men's side, though, whatever to make it equal 50/50, on the women's side. There's a lot of pieces to it, but the 20.5 million is what we'll share in revenue to the athletes, and then any dollars we spend on extra scholarships for us, which we're predicting about 1.5 million additional scholarships starting next year.
BS: All right, so the quick math would be, that's $22 million that's starting July 21, 2025, is added to the budget that we've got to somehow find.
GT: Yeah, it's just, you know, the way I try to explain it to our donors is we now have an expense category that we didn't have before. You know, we've always had salaries, we've always had travel, we've always had equipment. We now have an expense category called revenue sharing with our athletes, and so that's exactly what it is. It's a rather large expense category, and $20 million plus the scholarships. But everybody's facing the same thing, and that's what we're trying to do. We're trying to make it as equal footing as we can. So it's a cap system. You can only spend up to $20.5 million you don't have to spend all 20.5 but order to be competitive, that's what you're going to have to do.
BS: All right. So this starts in July. Does it stay that same rate for the next couple of years?
GT: I wish, I wish. There's a formula that for every three years, the dollars will be looked at again. So it'll be an annual basis to look at what the average revenue is, and then it'll go up 4% over the every three years, about 4% of what that increase is. So it's going to be interesting. It won't stay 20 million. It'll continue to go up over the next five years as we look at, you know, I haven't really done the math on that yet, but just assume it's not going to stay at 20.5 million.
BS: Yeah, some projected as high as 35 million by the time 10 years. Right. As you get a decade out. All right, let's pause here for a minute and look back through where we've been. Collectives have been the main way that monies have been distributed to student athletes. So how is this different from collectives?
GT: Couple of things. So when we first got into this and we started talking about name, image and likeness, again, the NCAA said, 'Well, schools, you can't be a part of that. You can't help the student athletes. They've got to that's got to be a third party'. So, we created these collectives. The collectives were started. They went out and found dollars separate, you know, either from our donors or from other people to give to the athletes directly from these collectives. That is now all coming in-house. So the athletic department will share the money. So collectives will change or maybe go away in some cases, but the collectives will not be involved when providing money directly to an athlete. You know, here we are still talking with our Wildcat collective as kind of their role. We're starting to work through those kind of things. They'll still be involved. It'll be changed. They won't be asking for direct money. They'll be asking for something different, probably more on the true NIL dollars. The true was supposed to be years ago, NIL dollars, and that's what we're focusing on right now.
BS: And there'll be a system that will be set up to sort of monitor that with how that plays out. We'll still wait and see. That's at least the theory. Again, this sounds like a lot of money, $22 million in this day and age, even in an athletic department budget, it's around $100 million and you're throwing another 20 in there. So how long have you and your staff, senior staff here at K-State, been preparing for this moment?
GT: Yeah, you know, it seems like for years, and it really hasn't been, because, you know, the settlement just, you know, the initial settlement got approved back in October, but we knew it was coming, right? There was discussion that the settlement was coming, but there were so many unknowns early that we weren't even sure how to approach it. Once we kind of learned what was going to be in the settlement, what kind of things we needed to focus on. We started probably in the fall, with our staff. We used our compliance, our business office, our fundraising staff, Jill Shields (our deputy), myself. We sat in a room and started just running numbers, okay, if we get to 20 million, and we decided this is how we're going to divide it up amongst the sports. What's that percentage? What does that look like? What is each team going to get? And we did a ten million exercise, a $15 million and a $20 million and we ran various scenarios. Been working on it for weeks and weeks and weeks now to try to figure out what it would look like for us. What our goals are for each of the teams, if we were going to add scholarships, what that cost would be. Again, the scholarships still have to be in the 50/50, gender equity. A lot of discussion about how the revenue is going to be shared, too. And to get into that take would us all day, but we'll still continue to talk about. But, yeah, we've been working on for several, several weeks since the fall.
BS: And what are some of the things that you've already done? I mean, some of it is, we're already a pretty lean athletic department in some respects. So what measure or measures have you already taken, and what will be continuing?
GT: Well, you know, we're always looking at other revenue sources. And we've been evaluating, how are we with our tickets? How are we with our parking? How are we with other revenues outside of our fundraising? And so we've looked at all that, and then some of it's come already. Some of our donors have already seen that. We are looking at ticket increases for basketball. We're looking at some other increases across the board. You know, next year in football, we have to be very careful not to drive our market away, but yet understand that we really need to dive deep into every revenue source we have. You know, for instance, taxes. We get charged taxes. We started doing that with our ticket buyers to recoup those dollars. And so, every little thing that we look at. How are we spending our money? You know, on travel. Are we making sure that we're not staying at the worst hotels, but we're not staying at five star hotels. But are we, you know, how are we feeding our athletes? Do we need to continue to feed them at the level we're feeding them as they start to make more and more money? So, we're really looking at everything we're doing, we're looking at our sponsorships, and where are we missing dollars that we can recoup to help us get towards that 20 million.
BS: It's an interesting time, and this is kind of more of a fact, finding video here to begin, and kind of where we're at. Coming up ahead in the next week, and then the week after, we'll be looking more at how K-State stacks up comparatively with those other schools who are also trying to figure this all out.
GT: Yeah, this isn't just a K-State issue. And I, you know, am fortunate I go across the country. I'm in some committees. Every athletic director I've talked to, whether it's a athletic director of Ohio State, or here, Iowa State, or the Big 12 – we're all facing the same challenge. We're all looking at it from different angles and how we're going to get there. And yet, it's a unique time. It is probably the biggest challenge that we faced. We've gone through a lot. We went through COVID. We went through the 1980s when we were cutting sports because the stock market went down. And, you know, I've been around a long time, and we've managed to get through it. We added, you know, cost of education. We went to feed and whenever we could, and we always thought, oh, how are we going to afford that? This is a major, major issue that we're all faced with, and it's not a small issue, but we'll figure it out. We have to figure it out. If we want to stay competitive and we still want to win football games and basketball games and baseball games or whatever, we have to make sure we get to that 20 million plus the scholarship increases as well.
BS: Yeah, it's as transformational a moment as it was when Coach Snyder was here trying to turn things around in football.
GT: A lot of similarities in terms of absolutely where we were back then.
BS: And there was the mindset and the fear that K-State would be left behind as far as the football power. And here we are, look outside in these stadiums and facilities, and it's all due to you, the fans and great people of K-State. And I know as we move forward, we're going to talk more about these changes, and we'll all pull together as Wildcat fans, as we always do. Great grit, determination. We'll pull ourselves up by the bootstraps and make sure we're still fighting and they're among the leaders in the country. But thanks for doing this first one. Very much looking forward to the weeks ahead.
GT: Yeah, and I hope everybody follows it along, because I hope that I can clarify any questions that there may be. Any maybe misinformation that's out there. And that's the goal of this is to really clear up any sort of concerns or questions people may have so they understand it a lot better.
BS: All right, so stay tuned next week. We'll be back with another edition of our special Ask the AD series, the future of K-State Athletics – The Future Part Two. And again, we'll start looking how K-State compares both with their counterparts in the Big 12 and across the region, and then also their impact here locally, in Manhattan, Kansas and across the state. Stay tuned for that. For Director of Athletics, Gene Taylor, I'm Brian Smoller, thank you for watching this special edition of Ask the AD.
Gene Taylor (GT): That'll be really important, absolutely.
BS: Let's start with the just the 40,000-foot view. The House settlement is kind of what we're talking about here, this is, what is the change that is coming this summer. I think people hear the phrase "House settlement", they think Congress. That's not necessarily what this is.
GT: No, it's a class action lawsuit brought by a group of athletes, but it was named after a swimmer at Arizona State whose last name is House. Obviously, there's a lot of athletes involved with it, and there's two pieces of this class action lawsuit that has been settled. It's now sitting in Judge Wilkins' court in California. She has until April 7, or sometime in April, to finalize the settlement. Both the plaintiffs and the defendants have been months and months you know, negotiating the settlement between the two sides. NCAA Division 1 institutions, primarily the Power Four/Power Five, in this group of plaintiffs. And so what it is is there's two pieces. There's a piece of those athletes that never had a chance to get their name, image, and likeness dollars. And that is back pay money that will come over a 10-year period to anybody who competed, from 2016 until a year ago. And then there's going forward money, which is the dollars that we will share institutionally with our student athletes. And that dollar is based on 22% of the average revenue of the Power Five revenues. And so that 22% equates out to about $20,500,000. Those dollars we will share with our student athletes going forward, starting in July of 2025. The back pay is a lot. It's 10 million a year over 10 years, and that's being distributed outside of the institutions, but through the NCAA and some other revenue sources.
BS: The $20.5 million is not the only number that will be added, because with this settlement, there is also the sort of tweaking of rosters per sport, addition and subtraction of scholarships.
GT: Yeah, so before we used to have scholarship limits. What's happening is anything that limits the student athletes' ability for opportunities, whether it's scholarships, whether it's the ability to transfer to another institution, that's where this lawsuit stemmed from. Is we were limiting the student athletes, or there was the perception of we were limiting. They still had a lot of little, great opportunities, clearly. So what they've done is, part of the settlement is they said, 'Okay, we're no longer going to make scholarship limits an issue.' If you want to give 34 baseball scholarships, go right ahead, if you want to give 105 football scholarships. But in that agreement, the other side of that is our side said, 'Well, we have to limit our rosters'. And so now we will have roster limits. Football will be 105, baseball will be 34, etc., all down the line. But if you wanted to, you could give as many scholarships as you'd like within that roster. I don't think any school is going to do that. They're going to maybe add some here on the men's side, though, whatever to make it equal 50/50, on the women's side. There's a lot of pieces to it, but the 20.5 million is what we'll share in revenue to the athletes, and then any dollars we spend on extra scholarships for us, which we're predicting about 1.5 million additional scholarships starting next year.
BS: All right, so the quick math would be, that's $22 million that's starting July 21, 2025, is added to the budget that we've got to somehow find.
GT: Yeah, it's just, you know, the way I try to explain it to our donors is we now have an expense category that we didn't have before. You know, we've always had salaries, we've always had travel, we've always had equipment. We now have an expense category called revenue sharing with our athletes, and so that's exactly what it is. It's a rather large expense category, and $20 million plus the scholarships. But everybody's facing the same thing, and that's what we're trying to do. We're trying to make it as equal footing as we can. So it's a cap system. You can only spend up to $20.5 million you don't have to spend all 20.5 but order to be competitive, that's what you're going to have to do.
BS: All right. So this starts in July. Does it stay that same rate for the next couple of years?
GT: I wish, I wish. There's a formula that for every three years, the dollars will be looked at again. So it'll be an annual basis to look at what the average revenue is, and then it'll go up 4% over the every three years, about 4% of what that increase is. So it's going to be interesting. It won't stay 20 million. It'll continue to go up over the next five years as we look at, you know, I haven't really done the math on that yet, but just assume it's not going to stay at 20.5 million.
BS: Yeah, some projected as high as 35 million by the time 10 years. Right. As you get a decade out. All right, let's pause here for a minute and look back through where we've been. Collectives have been the main way that monies have been distributed to student athletes. So how is this different from collectives?
GT: Couple of things. So when we first got into this and we started talking about name, image and likeness, again, the NCAA said, 'Well, schools, you can't be a part of that. You can't help the student athletes. They've got to that's got to be a third party'. So, we created these collectives. The collectives were started. They went out and found dollars separate, you know, either from our donors or from other people to give to the athletes directly from these collectives. That is now all coming in-house. So the athletic department will share the money. So collectives will change or maybe go away in some cases, but the collectives will not be involved when providing money directly to an athlete. You know, here we are still talking with our Wildcat collective as kind of their role. We're starting to work through those kind of things. They'll still be involved. It'll be changed. They won't be asking for direct money. They'll be asking for something different, probably more on the true NIL dollars. The true was supposed to be years ago, NIL dollars, and that's what we're focusing on right now.
BS: And there'll be a system that will be set up to sort of monitor that with how that plays out. We'll still wait and see. That's at least the theory. Again, this sounds like a lot of money, $22 million in this day and age, even in an athletic department budget, it's around $100 million and you're throwing another 20 in there. So how long have you and your staff, senior staff here at K-State, been preparing for this moment?
GT: Yeah, you know, it seems like for years, and it really hasn't been, because, you know, the settlement just, you know, the initial settlement got approved back in October, but we knew it was coming, right? There was discussion that the settlement was coming, but there were so many unknowns early that we weren't even sure how to approach it. Once we kind of learned what was going to be in the settlement, what kind of things we needed to focus on. We started probably in the fall, with our staff. We used our compliance, our business office, our fundraising staff, Jill Shields (our deputy), myself. We sat in a room and started just running numbers, okay, if we get to 20 million, and we decided this is how we're going to divide it up amongst the sports. What's that percentage? What does that look like? What is each team going to get? And we did a ten million exercise, a $15 million and a $20 million and we ran various scenarios. Been working on it for weeks and weeks and weeks now to try to figure out what it would look like for us. What our goals are for each of the teams, if we were going to add scholarships, what that cost would be. Again, the scholarships still have to be in the 50/50, gender equity. A lot of discussion about how the revenue is going to be shared, too. And to get into that take would us all day, but we'll still continue to talk about. But, yeah, we've been working on for several, several weeks since the fall.
BS: And what are some of the things that you've already done? I mean, some of it is, we're already a pretty lean athletic department in some respects. So what measure or measures have you already taken, and what will be continuing?
GT: Well, you know, we're always looking at other revenue sources. And we've been evaluating, how are we with our tickets? How are we with our parking? How are we with other revenues outside of our fundraising? And so we've looked at all that, and then some of it's come already. Some of our donors have already seen that. We are looking at ticket increases for basketball. We're looking at some other increases across the board. You know, next year in football, we have to be very careful not to drive our market away, but yet understand that we really need to dive deep into every revenue source we have. You know, for instance, taxes. We get charged taxes. We started doing that with our ticket buyers to recoup those dollars. And so, every little thing that we look at. How are we spending our money? You know, on travel. Are we making sure that we're not staying at the worst hotels, but we're not staying at five star hotels. But are we, you know, how are we feeding our athletes? Do we need to continue to feed them at the level we're feeding them as they start to make more and more money? So, we're really looking at everything we're doing, we're looking at our sponsorships, and where are we missing dollars that we can recoup to help us get towards that 20 million.
BS: It's an interesting time, and this is kind of more of a fact, finding video here to begin, and kind of where we're at. Coming up ahead in the next week, and then the week after, we'll be looking more at how K-State stacks up comparatively with those other schools who are also trying to figure this all out.
GT: Yeah, this isn't just a K-State issue. And I, you know, am fortunate I go across the country. I'm in some committees. Every athletic director I've talked to, whether it's a athletic director of Ohio State, or here, Iowa State, or the Big 12 – we're all facing the same challenge. We're all looking at it from different angles and how we're going to get there. And yet, it's a unique time. It is probably the biggest challenge that we faced. We've gone through a lot. We went through COVID. We went through the 1980s when we were cutting sports because the stock market went down. And, you know, I've been around a long time, and we've managed to get through it. We added, you know, cost of education. We went to feed and whenever we could, and we always thought, oh, how are we going to afford that? This is a major, major issue that we're all faced with, and it's not a small issue, but we'll figure it out. We have to figure it out. If we want to stay competitive and we still want to win football games and basketball games and baseball games or whatever, we have to make sure we get to that 20 million plus the scholarship increases as well.
BS: Yeah, it's as transformational a moment as it was when Coach Snyder was here trying to turn things around in football.
GT: A lot of similarities in terms of absolutely where we were back then.
BS: And there was the mindset and the fear that K-State would be left behind as far as the football power. And here we are, look outside in these stadiums and facilities, and it's all due to you, the fans and great people of K-State. And I know as we move forward, we're going to talk more about these changes, and we'll all pull together as Wildcat fans, as we always do. Great grit, determination. We'll pull ourselves up by the bootstraps and make sure we're still fighting and they're among the leaders in the country. But thanks for doing this first one. Very much looking forward to the weeks ahead.
GT: Yeah, and I hope everybody follows it along, because I hope that I can clarify any questions that there may be. Any maybe misinformation that's out there. And that's the goal of this is to really clear up any sort of concerns or questions people may have so they understand it a lot better.
BS: All right, so stay tuned next week. We'll be back with another edition of our special Ask the AD series, the future of K-State Athletics – The Future Part Two. And again, we'll start looking how K-State compares both with their counterparts in the Big 12 and across the region, and then also their impact here locally, in Manhattan, Kansas and across the state. Stay tuned for that. For Director of Athletics, Gene Taylor, I'm Brian Smoller, thank you for watching this special edition of Ask the AD.
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